Prices for all San Diego home types took a dip in June.

The median price for San Diego County's resale single-family homes — the point at which half the homes sold for more and half for less — was $931,000, down from its peak in April of $950,000.

The June resale condo median was $630,000, down from its peak of $663,000 in May.

The drop in prices comes as rising mortgage rates have slowed seemingly unstoppable gains. The overall June median home price in San Diego County — a combination of new and resale condos, townhouses and single-family homes — also dropped to $825,000, down from the all-time high of $850,000, according to CoreLogic/DQNews.

Prices were mostly down across Southern California, but San Diego’s 2.9 percent monthly drop was the largest among the six counties.

Prices in San Diego County have been on a nearly constant upswing since the start of the pandemic in March 2020, when the median home price was $590,000. It was expected at the start of the year that rising interest rates would slow the market — but it had the opposite effect: pushing buyers to get a house, no matter what it took, before rates went up more.

But that could only last so long as mortgage rates continued to eat into what buyers could reasonably afford, said real estate analyst Mark Goldman. "Prices kept going up the last few months as the number of buyers continued to outpace sellers, but it seems to have finally leveled off to a more balanced market."

One sign that the market is cooling, which anyone might have noticed the last few weekends, is an increased number of signs for open houses. “The signs are everywhere. I mean that literally,” Goldman said. “When you see so many open house signs, it means the agents are needing to put in a little more effort.”

He said he didn’t think housing prices were heading for a big reduction, but the pace at which prices go up will slow quite a bit. Goldman said there is still high demand for homes in San Diego County — just not as much as in January when the 30-year, fixed rate mortgage rate was 3.45 percent.

The interest rate for a 30-year, fixed-rate mortgage was 5.52 percent in June, said Freddie Mac, up from 2.98 percent the year before. The rate is up sharply from December 2020’s average of 2.68 percent, which was the lowest in records going back to 1971.

That means the monthly cost for a San Diego home at the median price, assuming 20 percent down, has gone from around $3,050 to $4,040.

Home inventory has increased from historic lows at the start of the year when there were roughly 2,000 homes for sale. There were 4,711 homes for sale from June 6 to July 3 - still low by historic standards but up from 4,540 at the same time in 2021. In 2020, there were 6,029 homes for sale at the same time, and 8,657 in 2019.

Sales have also slowed, with 3,275 in June, down from 3,514 the previous month.

There are more price reductions these days, and buyers not jumping at every home. About 8.5 percent of active listings in San Diego County had a price drop in June. That compares to the national average of 6.8 percent.

During much of the last two years, homes would sell in a few days - usually by the end of a weekend. Now, homes are taking two weeks to a month to sell.

Source: SDuniontribune by Phillip Molnar